Beware of Tax Scams: How Social Media is Becoming a Hotbed for Tax Fraud
In today’s digital age, social media has become a powerful tool for communication, entertainment, and even commerce. However, with its widespread use, it has also become a breeding ground for scams, including tax fraud schemes that target unsuspecting individuals. Tax scams spread via social media can have devastating financial consequences, and it’s crucial to be aware of these threats to protect yourself and your personal information.
Misinformation provided by social media is causing taxpayers to claim credits on their tax return that they are not eligible for. Some of the major scams are surrounding the Fuel Tax Credit, the Sick and Family Leave Credit and with household employment taxes.
The Fuel Tax Credit is for off-highway businesses and farming use. Taxpayers need to have a business purpose and qualifying business activity to qualify for it and most taxpayers do not qualify for this credit.
The Sick and Family Leave Credit was available for self employed individuals for 2020 and 2021, but it is not available for 2023 tax returns. Many individuals are claiming this credit based on income earned as an employee and not as a self-employed individual.
Many taxpayers are also creating fictional household employees and filing Schedule H, Household Employment Taxes, to claim a refund based on false sick and family medical leave wages that were never paid.
The IRS has found that social media inspires people to try out these tax strategies, causing a number of false claims for credits that taxpayers are not entitled to.
If you feel that you have claimed one of these credits incorrectly or have any questions regarding these credits, feel free to contact our office.
Renee Greenspan, EA
